What is meant by “green” steel or “green” cement? And is a ton of “green” steel produced in a factory in Germany the same as “green” steel made in a factory in India?  

With green procurement efforts underway, agreeing on how to define green — or “low-carbon" — products is increasingly important. Harmonized ways of determining an industrial product’s “embodied” greenhouse gas emissions are needed to avoid the patchwork of definitions that has emerged and enable industrial decarbonization policies,  such as green procurement programs or the EU’s Carbon Border Adjustment Mechanism (CBAM), which imposes tariffs on imported goods based on their carbon footprint.  

New analysis from WRI shows how global initiatives and governments are defining ‘green’ cement, concrete and steel products, and offers some recommendations for the way forward. 

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EMERGING GREEN STANDARDS FOR CEMENT AND STEEL DECARBONIZATION

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Why Is Product-level Emissions Accounting Important for Decarbonizing Heavy Industry? 

Depending on the purpose, emissions can be calculated at the product and facility level, all the way up to the company and country level. At the most granular level, greenhouse gas (GHG) emissions accounting helps industrial companies, governments and initiatives determine an industrial product’s emissions intensity, or how many tons of carbon dioxide equivalent (CO2e) emissions are released per ton of product manufactured. 

Once we have emissions intensity data for these products, governments can formulate policies that incentivize or mandate emissions intensity reductions. Effective emissions accounting and benchmarking enable the successful implementation of industrial decarbonization policies (see box below). Accurate product-level emissions reporting, accounting and benchmarking form the foundations of effective industrial decarbonization policies.

Industrial decarbonization policies and product-level emissions accounting

Several product-focused GHG mitigation measures — such as green procurement programs, carbon-based tariffs, and building codes requiring the use of low-carbon products — require consistent methods to calculate associated emissions and credible benchmarks to define what qualifies as a low-carbon product. Without robust standards for measuring emissions and determining low-carbon emissions intensity thresholds, these initiatives and policies cannot be implemented effectively.

Green procurement is a key example. As some of the largest consumers of cement, concrete, and steel, government entities can help reduce industrial emissions by exclusively purchasing versions of these products with few embodied GHG emissions. Companies can also participate in nongovernment green procurement programs, such as international initiatives like the First Movers Coalition, where companies commit to purchasing near-zero emissions products. However, these policies rely on emissions being measured consistently and assessed against clear benchmarks.

Climate-oriented trade policies, such as carbon border adjustments (CBAs), also depend on product-level emissions accounting. For example, the EU CBAM charges fees on imports into the EU based on their emissions intensity, meaning this policy requires verifiable methods to assess embodied emissions in products across both producers and countries.  

Other policies — like embodied carbon limits in building codes, standalone green product taxonomies, and newer innovative policies like tradable low-carbon product standards and production tax credits — can all incentivize industrial companies to reduce their emissions, as long as they are underpinned by reliable product-level emissions data and clearly defined low-carbon benchmarks. 

What do emissions accounting and benchmarking entail?

When companies set net-zero targets and undertake corporate emissions accounting through the Greenhouse Gas Protocol, they need to account for emissions associated with their activities. This can include emissions from energy, raw material extraction and the upstream and downstream transport of products.

However, to support most of the policies discussed here, governments and companies need to account for emissions at the product level, rather than the facility level or the corporate level, as is the case with many other policies.  

Measuring the environmental footprint of a product involves several components: 

  • Product Category Rules (PCRs): PCRs offer guidance for developing environmental product declarations (EPDs) for specific product types. They determine how to conduct life cycle assessments (LCAs) and establish the boundaries of emissions measurement as cradle-to-gate or cradle-to-grave. They ensure that LCAs for similar products are assessed in the same way and enable product comparison.
  • Life Cycle Assessments (LCAs): LCAs measure the overall environmental impact of a product over its entire life cycle, from raw material sourcing and use to end-of-life disposal or recycling. The data produced by LCAs form the foundation of reporting documents such as EPDs.
  • Environmental Product Declarations (EPDs): EPDs provide comprehensive information on the environmental impacts of individual products. They are based on the results of LCAs and are developed using PCRs. Similar to nutrition labels on food products, EPDs summarize environmental impacts, which may include water consumption, pollution, eutrophication, acidification and global warming potential (GWP), using standardized metrics. However, EPDs do not determine whether a product’s global warming potential is low enough to be considered green or not; that is where benchmarking comes in (discussed in the next section).

Companies can collect emissions data needed to produce EPDs or other forms of product-level emissions reporting using either measurement-based or calculation-based methods based on individual processes at their facilities.

However, product-level emissions accounting involves more than calculating the emissions from industrial processes. It also includes attributing those emissions to individual products so a product’s associated emissions data can be evaluated for policy compliance or certification. This attribution raises tricky emissions accounting dilemmas which governments and international initiatives grapple with in various ways, as explained later in this article.

How Are Green Steel, Cement and Concrete Defined Around the World?

In addition to accounting for a product’s emissions, some of the industrial decarbonization policies discussed above, such as embodied carbon limits in building codes and green procurement, require emissions benchmarking.

Product emissions benchmarking involves setting quantifiable emissions intensity targets or thresholds that a product must meet to comply with a policy. For example, for a hot-rolled structural steel product to be eligible for public procurement in California, it must be no more emissions-intensive than the established benchmark of 1.01 tons (t) of embodied CO2e per ton of steel.  

The initiatives and governments examined in the working paper use several different approaches to setting product-level emissions benchmarks, making comparisons difficult. In some cases, benchmarks don’t vary in stringency within individual product categories (see graphs below). 

These static benchmarks can still have multiple tiers to accommodate different ambition levels. For example, the Indian government has developed an emissions-intensity taxonomy for finished steel with three different emissions-intensity performance tiers, ranging from the most ambitious five-star tier to the less ambitious three-star tier. To implement the now-halted Buy Clean program, the U.S. General Services Administration adopted benchmarks for cement at three different ambition levels, with procurement priority given to products meeting the highest tier. Such tiered approaches can encourage producers to exceed minimum benchmarks while allowing them to strive for higher targets according to feasibility.  

The First Movers Coalition, on the other hand, has established single, high-ambition emissions benchmarks to mobilize procurement of “near-zero emission” cement and steel in order to signal market demand for innovative, ultra-low-emissions cements.

Some governments, including Türkiye and Ireland, have created ceilings for the amount of clinker — the most emissions-intensive ingredient in cement and concrete — allowed in cement and concrete used for public construction projects (see Figure 3). The goal is to minimize the climate impacts of government cement consumption.

These “sliding scale” benchmarking approaches are contentious in the steel sector. By applying more stringent emissions intensity standards to steel products with higher scrap content, critics argue that these benchmarks unfairly penalize “secondary” steel producers that use electric arc furnaces to recycle scrap metal into usable steel products, avoiding coal-based iron smelting. Advocates counter that scrap steel is insufficient to satisfy global steel demand and assert that secondary steel producers, alongside primary steel producers, should be incentivized to reduce their emissions to mitigate climate change.

Canada has pursued a different way to address the scrap steel dilemma by applying a credit of 585 kilograms of CO2e/t steel to products based on the proportion of primary steel versus scrap-based secondary steel in a product, effectively reducing the product’s reported emissions compared to the benchmark. While similar in effect and intent to a dynamic sliding-scale benchmark, Canada’s approach differs in that it applies a proportionate adjustment to products’ performance against the static benchmark set by the government.

The Differing Approaches to Emissions Accounting 

While differences in benchmarking approaches and emissions intensity thresholds can lead producers to pursue different targets (and markets), differences in emissions accounting methodologies can make it difficult to translate and compare products’ climate impact.  

In their recent working paper, the authors identified several key differences in how emissions are accounted for at the product level, including: 

  • Life cycle stages included: Most standards require accounting for emissions from “cradle-to-gate”, which includes raw material extraction and transport as well as product manufacturing. However, some standards, like those from the Global Steel Climate Council, require accounting for emissions from the entire life cycle — or “cradle-to-grave” — including product use and end-of-life disposal or recycling.
  • Where policies apply in the supply chain: While some governments and initiatives apply emissions intensity benchmarks to cement, others apply them to concrete. In the steel sector, policymakers have to choose between crude steel or multiple other steel product categories, each with different average emissions intensities.
  • Inclusion of carbon capture, utilization and sequestration (CCUS) and/or carbon dioxide removal offsets: Most standards offer explicit guidance on how to account for emissions reduced through CCUS. In rare cases, policies or initiatives allow companies to purchase carbon dioxide removal offsets from third parties outside their supply chain to lower their products’ reported emissions intensity.
  • Accounting for avoided emissions from biomass and waste utilization: Utilizing biomass- and non-industrial waste-derived products to replace fossil-based fuels and feedstocks can avoid consumption of natural gas, oil and coal, along with their associated emissions. However, burning these biomass- and waste-derived fuels to produce cement still generates GHG emissions, albeit emissions that might have otherwise come from landfills and decomposition of organic matter. Some standards allow steel and cement producers to account for the net emissions impact of waste utilization.
  • Allocating emissions to byproducts and co-products used in different value chains: Industrial waste and byproducts, like steel slag, can sometimes be used to replace emissions-intensive ingredients such as cement clinker. While many accounting standards prohibit allocating emissions from the primary product to waste products, some standards, like Low Emission Steel Standard, LESS, offer emissions reduction credits for waste and byproducts sold to replace clinker.
  • Use of chain of custody models: Chain of custody models are used to track the emissions-related characteristics of materials through supply chains, from raw material extraction to manufacturing to sale. For example, if a facility receives two different types of raw materials (input) — one with lower emissions and another with higher emissions — and combines them to produce multiple outputs, a chain of custody model outlines how to follow these input materials through the supply chain and how their distinct emissions characteristics are allocated among the outputs.

These differences in emissions accounting standards make it difficult for policymakers and companies to compare certified products. Low-carbon industrial producers seeking to trade their products across borders and capitalize on incentives for green industrial production would have to invest scarce resources to comply with overlapping emissions accounting and reporting standards. 

What’s Next: Streamlining Global Low-Carbon Product Standards 

Given how much steel is traded internationally and how much cement and concrete producers can benefit from green procurement programs, incompatible policies and standards can hinder climate-oriented trade and procurement and, in turn, slow the development of markets for low-carbon cement, concrete and steel.  

To drive low-carbon industrial innovation, governments and standards-setting organizations need to coordinate to streamline and increase the effectiveness of the global landscape of low-carbon benchmarks and standards, focusing on a few key objectives and strategies:

  • Improving emissions data availability, quality and transparency through investments in ubiquitous emissions data accounting and reporting.
  • Leveraging existing standards in government policy to avoid duplication and improve interoperability.
  • Harmonizing standards across borders and within domestic national and subnational policies and pursuing global standards alignment where possible.
  • Considering and adjusting for impacts on small-scale producers during policymaking and standard-setting.
  • Incorporating human health impacts of industrial activity into procurement and trade policy.
  • Establishing a benchmark convergence timeline to build the foundation for globally unified, net-zero-aligned standards for green cement, concrete and steel products in the future. 

When implemented effectively, green procurement programs, climate-oriented trade measures and other industrial decarbonization policies can accelerate the development and market share of innovatively produced, lower-carbon industrial materials. But to achieve this, policymakers must prevent the emergence of an inefficient web of overlapping and contradictory standards.

Recent developments at the 2025 UN Climate Summit (COP30) signal promising signs of progress. But efforts to align standards are only just beginning. And policymakers must ensure that the process is inclusive, multilateral, forward-looking and streamlined.

While these efforts will be difficult, they are needed to avoid linking industrial sustainability initiatives to economic hardship for producers developing innovative, low-carbon materials.